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Tag: major donors

As part of an MA in Philanthropic Studies (undertaken at the Centre for Philanthropy at the University of Kent) I completed a study which aimed to identify the role that prospect research plays in major donor fundraising. The study involved a survey, undertaken in 2018, of major donor fundraisers and prospect researchers working in higher education institutions in the UK. I’m pleased to say that the results of the study are now available to download.

As a quick summary the results of the study cover a number of areas, such as:

The activities commonly undertaken by prospect researchers

The purposes or reasons for which fundraisers use prospect research

How necessary fundraisers feel research is to their work

The ways in which prospect research contributes to fundraising

Prospect research metrics (i.e. what data is being gathered on the output or impact of prospect research)

In particular, the results can be used by non-profit organisations when analysing the use of personal data for prospect research purposes under the GDPR. Until now, the non-profit sector did not have a reliable evidence base which outlined the purpose or necessity of prospect research, nor which identified if the purposes of prospect research could reasonably be achieved by other methods (which do not use personal data) – all important areas to analyse, particularly for those organisations relying on their Legitimate Interests to process personal data for prospect research. In practical terms, the data and evidence presented in the paper can now be used by any non-profit organisation when completing, for example, a Legitimate Interest Assessment or a Data Privacy Impact Assessment.

Beyond GDPR, the paper highlights that, on the whole, the prospect research community is not particularly good at gathering evidence which illustrates the impact (or the ROI) of prospect research. That said, it does also show that the vast majority of major donor fundraisers are overwhelmingly positive about the ways in which prospect research supports them in their work.

If you think it might be useful for you or your organisation, please do download the paper and (when sufficiently caffeinated) have a read. I’d be more than happy to answer any questions or chat about the data/paper in more detail if you’d like to get in touch.

Why do we say that strategic donor (‘major donor’) programmes take eighteen months to break even? It’s a number I have heard again and again, and that I repeat when I am teaching strategy at the Postgraduate in fundraising at the University of Barcelona, without having hard data to back up the claim.

To find an answer, I have been experimenting on myself. Since January 2017 I have been working a few days a week with Pallapupas, the healthcare clown organisation in Catalonia. I’m their strategic donor fundraiser. I thought, with the arrogance of years of experience as a consultant and researcher, that – ha! – this was going to be easy. In six months, I thought, we’ll fix this and I can sit back and watch the money roll in.

And here we are, almost eighteen months later and now, after a lot of blood, sweat and tears, now we can see the money starting to roll in.

So why? Why does it take eighteen months to get to the tipping point in a strategic donor programme? I have worked with many different programmes across Europe, but there are common threads in all of them:

You, and Me

Fundraising shines a bright light on your own character. So I have learned, in the last 18 months, that I am no blooming good at cold calling by phone (OK, I am doing it in my second language, but that’s no excuse); that I really enjoy building networks of people and sometimes focus more on that than on the money; and that I develop relationships with people over time, not at speed. All of these factors help explain why it takes me time to reach breakeven.

But this is not some embarrassing confessional. I’m illustrating the point that each of us who takes on a strategic fundraising role brings our character to play – and that affects how long it takes to reach the moment when the programme is up and running.

The Case

Many European NGOs are starting strategic donor programmes after years of running mass-marketing, mail- and email-driven, fundraising programmes. They have had years, therefore, of making offers to donors like ‘with €10 a month you can save a life.’

So the first challenge for the new strategic donor fundraiser is how to build a case for €10,000, or €100,000, or €10m. That is an enormous leap for many organisations. Some of them back out, building middle donor programmes with asks in the hundreds, not the thousands of Euros.

Making the case means putting together a budget, making a business plan, winning buy-in from colleagues and key staff, and producing a convincing elevator pitch. All of which takes time…and more, if you hit problems with the Project Pipeline, or the words.

The Project Pipeline

Does the organisation have €100,000 projects? Or €10m projects? Or dreams at these levels of funding? For many organisations this is a challenge. The project pipeline does not exist – there is no ‘deal flow’ in investment terms – so there is nothing for the fundraiser to propose to her prospects. Sometimes, in large, complex organisations, you can see the projects but they are distant and hazy, and there are 30 layers of stakeholders between you, the fundraiser, and the project. You know it is going to take an age to cut through the jungle.

Even when you can see the projects, you need permission to use them. In some organisations this can take a long time. In others, it’s a race to own a project before another colleague grabs it to pitch to her favourite donor.

The Words

When you join an organisation as a new fundraiser, you have to learn that organisation’s language. Some of this is technical language – of the type you would use in a medical research organisation for example – and some of it is an adaptation to the language of your end-users or beneficiaries, as happens when you shift from talking about ‘people with disabilities’ to ‘people with different abilities.’

Your choice of words is sensitive, and more so when you are working with strategic donors because you will be working alongside the board and the director, both highly tuned to the right words. Eighteen months in, and I am still learning how to paraphrase the mix of culture, theatre, humour and hospitalised kids that typifies clowns in healthcare.

The Data

Too many organisations in Europe have too little data. We know so little about our donors. Yes, data protection and privacy are key issues, but your local supermarket knows more about you, your interests, your attitudes and your wealth than the biggest organisation that you donate to. Many organisations don’t know what jobs their donors do, what age they are, or anything about their family situation. Without this data we are working in the dark.

Compare this to the private banks, who are increasingly entering the HNWI and UHNWI area to offer philanthropic services. I spoke with the head of philanthropy at a leading private bank (50,000 clients, 500 account managers) a few weeks ago; he told me that because he can see the banking account details of his clients he knows exactly which charities they are giving to, and can work out which causes the client is interested in. He can offer philanthropic services (including channelling money via the bank’s own foundation) precisely tailored to that client’s needs.

Because they have too little data, many organisations have to focus on the tiny handful of prospects whom they know directly, via personal contacts. So instead of broadening their strategic donor programme to reach the hundreds of existing donors who have the money, they rely on the tiny inner circle.

Systems

Our systems don’t just slow us up, they can clog us up. A simple system problem – when, for example, the donor database does not talk to the accounts system, or where the two use a slightly different coding system – can mean that we have to manually re-enter data. Or it can mean that searches for a donor’s history are a headache.

Sometimes it is the thank-you system. I have worked with organisations that have an automated process for sending out thank-yous of the ‘Dear Sir/Madam Thank you for your gift of €xxxx [fill in number]…’ type. So Madame LaRiche, who has just sent you half a million, gets a ‘Dear Sir/Madam…’ letter and there is nothing you can do to stop it. It takes time to persuade the I.T. team to change their ways.

These are stupid niggles in the system. But they slow us down. Or more likely, catch us out just when we think we have a programme ready to go.

Leadership

You have produced the case, sharpened your elevator pitch, identified potential donors and built a workplan. But you need the leadership to be engaged if this is going to work. You need their buy-in because you want to work with them and their contacts, but also because you and they are going to have to take some tough decisions (this ALWAYS happens with strategic donor programmes); should we work with that potential donor? What do we do when a prospect offers us a lot of money…to do the project he wants, not the one we want?

“Bring in leadership from the start.” Yes, that is what the textbooks say. But making that happen in real, busy lives where people have a load of other priorities, takes time.

Reporting, and donor stewardship

This is going to happen after you win the new donations and partnerships. But you simply have to get this sorted out before you meet your first prospect. Bench-test the process with your colleagues so that you understand every potential glitch on the way. Your donors and partners want to see the numbers, the stories, the videos and the pictures of ‘their’ project. So if that information is going to be hard to collect because your field office is hard to reach, because you need special permission to use this or that photo, or because the impact report is still being compiled, then either find alternatives, or wait until the material is sorted out.

So that’s why it takes 18 months

Because you need to get all of this moving at the same time, involving players right across your organisation, from the chair of the board to the lab technician or assistant field worker. In amongst all of these threads of action is a critical path, the line you must follow in order to achieve your goal. But when you are new to the organisation, you simply cannot know where that path lies, nor where the potholes are that are going to slow you down. You have to learn, to listen, to find all this out. And that takes time.

Inside, not Outside

None of this is the market, or the culture of philanthropy – the reasons most commonly cited for the time it takes to get a programme to maturity. These are all internal reasons – stuff inside the organisation, combined with your own character traits, that limit your speed of action.

Faster?

Are there shortcuts? Could we be working faster? In hindsight, you can see that there are. But the problem is that you can’t get to the hindsight until you have put time behind you. Getting leadership onside early certainly speeds up the process, in part because it opens doors to stakeholders in technical, financial and communications departments. Quick work with the case – especially, building and testing case documents internally to get buy-in – is also a help. But neither of these routes is going to shave a lot off your timescale.

So I have learned to set expectations, right from the start. To say ‘eighteen months’ in the knowledge that that is how long it will probably take, but also in the hope that the break-through will come sooner.

The International Fundraising Congress is – I declare my interest as a volunteer – the world’s best fundraising conference. Each year in October around 1,000 people from over 60 countries gather in a conference centre just back from the beaches of the North Sea, west of Amsterdam. It’s a buzzing, active gathering of leaders, new thinkers, experts and innovators…and runs the best end-of-conference dance party I’ve ever attended.

This year’s theme was ‘A New Conversation’. It was about linking fundraisers with the social and environmental causes they promote, about activism and about participation.

Participation, and the ‘new power’ were the themes of Jeremy Heimans’ opening plenary. Jeremy, one of the founders of Avaaz, compared ‘new power’ with ‘old power’ using the tools he describes in a joint paper with Henry Timms, founder of Giving Tuesday. In his view, organisations must adapt to a world in which people want to move from consumers to shapers and designers of ideas, to crowdfunders and eventually to co-creators and co-owners of ideas and product. People want to participate. That participation may be short term – he described the short life of the Occupy movement – and it is certainly not loyal: people switch in and out of their membership of social media groups.

Old power is characterised by hoarding and controlling power, influence and ideas. We buy a car, a frozen pizza or a magazine, but have very little say, often no say at all, in what they contain or how they are produced; we are merely the consumers, buying the product, or not. When we don’t, the old power business rethinks the product and offers us a new one, until they produce the car/pizza/magazine that people are willing to purchase.

New power is, in Jeremy’s words, a ‘current’, like electricity or a fast-flowing stream. We can’t hoard it, but maybe we can channel it. It’s the fast-flowing current of knowledge that is filling the encyclopaedic sea of Wikipedia. It’s the brains behind Linux and open-source software. It’s the million people on the streets of Barcelona to protest police brutality, or the signatories on a campaign website.

Great, Jeremy, but how can we use this in major donor fundraising?

The clue came in another session at the conference. Led by Dr Max Martin, Global Head of Philanthropy at Lombard Odier bank in Geneva (and one of the most brilliant people working in philanthropy in Europe), the session was about innovations in finance for Social Purpose Organisations (SPOs). During the session we heard from the CEO of the Womanity Foundation about a cleverly designed funding model involving UBS Optimus and CIFF in which Optimus provide initial funding for an educational project, with CIFF paying the foundation back for each measureable outcome from the project. And from the International Red Cross and Red Crescent (ICRC) about the first Humanitarian Bond, a CHF26m bond issued by ICRC in conjunction with Lombard Odier and including, amongst others, Fundació LaCaixa, the formerly Catalan banking foundation.

Developing the bond was a long and arduous process for ICRC. But it started with a clever move; before they had gone any further than having the idea of a bond, ICRC involved the bank. That meant persuading board members of ICRC, a very venerable organisation, to sit down with bankers and work out what they wanted to do, and how they would do it. The donor – in this case the leading financier – was involved right from the start of the project.

And that’s the connection with Jeremy Heimans. Because although ICRC and Lombard Odier are both, most definitely, ‘old power’ organisations, this CHF26m project worked in part because ICRC gave up their power, opened up to a donor and shared the process of development with them. Together they came to a bigger, better solution than each player could have managed on their own.

So although crowdsourcing and ‘new power’ sound like the antithesis of the kinds of understated high-level philanthropy that result from our relationships with strategic donors, the same underlying force occurs in both; involve your donors, your investors and your stakeholders RIGHT FROM THE START. Share your power of project- and programme-creation with them, and you could win, big-time.